RSF Social Financehttp://rsfsocialfinance.org
Thu, 24 May 2018 03:25:56 +0000en-UShourly1https://wordpress.org/?v=4.9.6The Ugly Truth about Arts Institutions Led by Women of Colorhttp://rsfsocialfinance.org/2018/05/22/the-ugly-truth-about-arts-institutions-led-by-women-of-color/
Tue, 22 May 2018 19:31:51 +0000http://rsfsocialfinance.org/?p=19455As the founder and executive artistic director for the Bishop Arts Theatre Center (BATC) in Dallas, Texas, I experience racism, sexism, and classism almost daily. It’s no secret that racial and gender disparity is a …

]]>As the founder and executive artistic director for the Bishop Arts Theatre Center (BATC) in Dallas, Texas, I experience racism, sexism, and classism almost daily. It’s no secret that racial and gender disparity is a chronic problem for women in leadership at arts institutions in the United States, but for women of color, there is a severe, unconscious level of prejudice.

The study found zero women of color as executive directors in LORT, the largest professional theatre association in the United States, and only one woman of color as an artistic director. This is a dismal reality for women like me who are founders of their own theatre company, hoping to transition to jobs at LORT theatres in the future. The ugly truth, which was revealed in the study, is that “hidden behind a gender- and race-neutral job description is an expectation, grounded in a stereotype, of what a theatre leader needs to look like: white and male.”

White men are the long-standing majority of those in top positions, which translates to who funders trust to provide financial resources, who the media decides to give a platform to, and who board members select to lead their organizations. Many female leaders experience deeply entrenched inequalities and are pushed away from economically viable opportunities; by and large, women of color are not looked upon as masterminds or artistic leaders in the field.

Last year I attended Theatre Communications Group’s (TCG) Fall Forum on Governance in New York City. While I knew white men were the dominant culture for artistic directors in the industry, the affinity group breakout sessions made it crystal clear—in the one made up of tenured founding artistic directors of twenty-plus years, I was the only woman of color. Throughout the forum, it was refreshing to learn that TCG was creating much-needed dialogue about issues never discussed before and asking bold questions about what leadership should look like in our field. But it was discouraging to hear many attendees lament that the same conversation has been happening for years. It’s apparent very little progress has been made.

In November 2016, just days after Donald Trump was elected, I attended the Facing Race conference in Atlanta. We had all arrived depleted, in a state of disbelief. Roxane Gay, best-selling author and recent Guggenheim Fellowship award recipient, outed white women who had voted for Trump. It was there many of us learned that, despite Trump having been caught on tape boasting about sexual assault, more than 53 percent of white women voted for him. Most attendees wondered how a sexual predator could have been elected as our commander-in-chief. It was an honest question that we all wanted answered.

At the end of the conference, we collectively agreed to forge ahead and tackle whatever problems would inevitably arise in the months to come. Our marching orders were to get comfortable having uncomfortable conversations—whether political, professional, or personal. For me, it meant to show up more authentically in my relationships and call out discrimination in any form, whether it’s a staff member who is not accustomed to being led by a woman of color or a colleague who throws rocks and hides their hands.

“Hidden behind a race-neutral job description is an expectation, grounded in a stereotype, of what a theatre leader needs to look like: white and male.”

The BATC has grown from a small community theatre to a multicultural, multidisciplinary resource center for the neighborhood. We offer a full season of theatre performances, jazz concerts, speaker series events, and year-round arts education programs. Property ownership has afforded us the autonomy to diversify our income and sustain our organization independent of government grants, but I was taken aback when a national funder declined a grant application citing disapproval of our multidisciplinary programming. Places like the Public Theatre and the Denver Center for the Performing Arts are lauded for the innovative use of their spaces. How is the BATC different? I couldn’t help but recall Janelle Monáe’s line in the movie Hidden Figures: “Every time we have a chance to get ahead, they move the finish line.”

Nonprofits led by women of color are judged by unrealistic standards set by funders who fashion themselves as allies. On occasions, I’ve had the good fortune of recruiting and securing former trustees from regional theatre to join our board. Their expectation is always to raise the same level of funding as they had in other positions, but the reality is that small to mid-size theatre companies, like mine, and particularly theatres led by women of color, have very few million-dollar donors in their Rolodex compared to regional theatres. In addition, the allocation of funds from corporate and wealthy private-sector donors is hugely skewed. I have found that while a funder might grant the BATC a $5,000 gift, he will fund a larger institution at a disproportionately higher level. It is a deeply entrenched racial and (in my case) gender imbalance strategically designed to keep women of color away from economically viable resources and under the radar.

In 2015, our theatre was invited along with five other organizations by the Embrey Family Foundation (EFF) to participate in an RSF Social Finance Shared Gifting Circle. EFF is a small family foundation in Dallas that supports groundbreaking socially conscious projects centered around racial and gender inequalities. The gifting circle was a revolutionary grant-making process where six selected nonprofits distributed $60,000 in funds among each other. Each organization was guaranteed a minimum of $2,000.

Although this was a new approach to grant making for our organization, I learned the concept has been around for over a decade. RSF’s model of shared gifting gives full decision-making authority to a group of grantees who evaluate each other’s proposals and make funding decisions together with transparency. Here’s how it works: The funder decides how much the participating organizations will share and distribute. A meeting date is established and each group is asked to submit a proposal for operating support or an upcoming project, which is reviewed by the participants prior to the meeting. On the meeting date, participants share personal stories and organizational biographies. There is an open discussion about each proposal and each representative determines how much to grant the other nonprofits. The process is designed to be simple and logical from an economic perspective and socially constructive from a community-building perspective. In an innovative and unusual twist on traditional grant making, participants are both grant recipients and grantors to each other.

Our organization walked away with a $10,000 grant that year—not a bad day’s work, right? But what was even more empowering was that I was able to gift thousands of dollars to a different arts group led by another woman of color—and she did the same for my organization in return. We had been in the trenches together, doing great work under the radar for a long time, and it gave us both a personal sense of satisfaction to reward the other’s organization. In 2016, I had the pleasure of co-facilitating a shared gifting circle for EFF that was made up of all women. And this month, I’m the lead facilitator for 2018 cohort, which will mostly include women of color artistic leaders.

The shared gifting circles are cathartic in many ways for minority female artistic leaders. We learn that until we talk to each other and affirm that our experiences are the same, we can’t fully support each other. Oftentimes we are pitted against each other, but with shared gifting competition becomes collaboration.

“Nonprofits led by women of color are judged by unrealistic standards set by funders who fashion themselves as allies.”

Hillary Clinton’s book What Happened should be required reading for any young woman interested in a leadership position in any field. The chapter on sisterhood had me bearing witness, out loud, like a congregant at a tent revival down a country road in rural Georgia. In it, Clinton recounts a conversation with Sheryl Sandberg, the chief operating officer of Facebook: “The more successful a man is, the more people like him. With women, it’s the exact opposite. The more professionally successful we are, the less people like us.” Women leaders, particularly women of color, suffer implacable hostility.

I am a member of a professional women’s group in Dallas called It’s Lonely at the Top, which is made up of executive directors in the Dallas/Ft. Worth area. I’m the only woman in theatre and only one of two women of color in the group, and I’ve found that while I share many similar concerns as the other women, my experiences as a leader are unique. Women of color struggle with disparities in funding, media attention, and recognition compared to our white male and female counterparts. Implicit bias is layered and complex, and, while it might be subtle to others, women of color know when we are being discriminated against. I’ve experienced first-hand being pushed to the margins in ways that should have been crippling.

There is a cadre of impressive young theatre practitioners, many of whom are women of color, being trained to be leaders in the field. At TCG’s Fall Forum last year, I was impressed with panelist members from artEquity, a dynamic organization that seeks to build practical and analytical skills necessary to address diversity and inclusion issues at an interpersonal, group, and organizational level. One of the most salient points made was that there must be a major paradigm shift in the industry if these young innovators would even consider leading arts institutions—currently, they are reticent because they feel there is not enough meaningful effort being made to dismantle systemic racism. Moreover, these young people want to see more than lip service. No one wants to be set up for failure. The industry has been talking about dismantling racism and systems of oppression for fifty years, but the reality is that change is slow. Female artistic leaders must be given leeway to experiment and fail and explore again without public shame. There must be the same financial investment in women of color as there have been in our white male counterparts.

Unconscious bias is layered, and when left unchecked it rears its ugly head in subtle ways that is oblivious to most people. White supremacy maintains its power in liberal advocates who are touted as progressives but who unconsciously discriminate against minorities and women of color on a daily basis. But I have always been an incorrigible optimist; it is a mindset that has helped me overcome seemingly insurmountable odds and left detractors befuddled. Indeed, a new day is on the horizon, and I am joining the legions of women and men to help usher it in.

]]>RSF Collaboratives: Filling a Funding Gaphttp://rsfsocialfinance.org/2018/05/15/rsf-collaboratives-filling-a-funding-gap/
Tue, 15 May 2018 23:32:22 +0000http://rsfsocialfinance.org/?p=19414Deb Nelson is vice president of client and community engagement at RSF.

]]>Before joining RSF Social Finance’s leadership team two years ago, I spent fifteen years leading Social Venture Network, a community of mission-driven entrepreneurs and impact investors. During that time, I got to know hundreds of social entrepreneurs who had launched companies and nonprofits that were tackling some of our most pressing social and environmental challenges.

The problem was that the most groundbreaking solutions often weren’t acknowledged, supported, or funded. Social enterprise models are less familiar than conventional ones to funders of all types. A lot of early-stage investors—even in the impact sector—are taught to seek hockey-stick growth, typically seen in tech pitches. But social entrepreneurs think about growth as a way to serve their mission, not as an end in itself. They may intend to remain rooted in a community and serve to inspire others rather than pursue rapid expansion. Or they may need a longer runway to build a sustainable supply chain, or they may face unconscious bias as a woman or a person of color. As a result, the most innovative enterprises that challenge the status quo are usually considered “unbankable” and can’t raise capital from conventional funders.

These are the challenges a growing number of funders—investors, philanthropists, foundations, and lenders—are working to address. While the dominant investment model remains a compartmentalized world where investors are expected to make as much money as possible over a short time, and philanthropists are expected to solve the problems that government and businesses don’t address, a growing number of funders are taking an approach that crosses old boundaries.

At RSF, in partnership with our community of donors, we’ve launched five Collaboratives to address this funding challenge by providing diverse forms of capital to social enterprises when they need it most: after they’ve proven their model works, but before they’re large enough to attract capital from conventional funders.

Project Equity helps communities retain quality jobs and local investment through its support for employee ownership. The nonprofit does so by promoting a worker-owned cooperative approach to retiring business owners and helping those who are interested assess whether it’s a fit for their needs. If so, Project Equity will work with a core group of employees to structure and successfully operationalize the transition. RSF provided Project Equity with a grant via the Local Food Capital Collaborative to support the professional development of Coke Farms in transitioning to a worker cooperative model.

The focus for each Collaborative is based on the needs our community identified and how capital can be most catalytic in sparking positive change. The Biodynamics Capital Collaborative and the Soil Health Capital Collaborative grew out of regenerative agriculture advocates’ search for effective ecological solutions that go beyond organic. The Local Food Capital Collaborative supports social entrepreneurs who are building a local, just, and sustainable food movement and offering viable alternatives to the current global food system.

Singing Prairie Farms has a mission to become the national brand for pasture-raised pork that builds soil health, sequesters carbon, builds rural economic resiliency, and provides consumers with a transparent and nutritious product. The social enterprise works with a growing network of farmers committed to these principles and provides trainings and consultation on agricultural practices. RSF provided a line-of-credit from the Soil Health Capital Collaborative to support its growth.

The Collaboratives are philanthropic initiatives. Because the money is gifted to RSF, the Collaboratives can fund earlier stage, higher risk social enterprises. We assess the mission alignment and financial sustainability of the enterprise and then provide loans, loan guarantees, investments, or grants, depending on the needs of the enterprises. We can also provide human and social capital in the form of advice, connections to co-funders, and access to networks and trainings. We recycle about two-thirds of the capital back into the Collaboratives, so we can support more social enterprises.

Kreyòl Essence makes hair and skin care products from 100 percent Haitian black castor and moringa oil. The social enterprise hires women in Haiti for its farming and production, creating valued jobs, and promotes multicultural wellness in the U.S. The company has planted 100,000 castor trees to help in regenerating Haiti’s degraded lands. From the Women’s Capital Collaborative, RSF provided Kreyòl Essence with working capital to help with setting up a new production facility and fulfill product orders. It also received a technical assistance grant to support business growth.

Our most recently launched initiative, the Women’s Capital Collaborative, is funded by gifts from women donors. One donor kicked off the fund with a $1 million matching commitment, a mother-daughter pair each donated $500,000, and a new donor contributed another $500,000. Over the past six months, we’ve deployed over $1 million to support 17 groundbreaking women-led social enterprises that provide opportunities for women and girls around the world. We’re working with other funders and partners to raise awareness about unconscious bias and the crucial need to flow more capital to diverse women leaders and entrepreneurs.

A new spinoff from the Hawthorne Valley Association in collaboration with a group of regional impact investors, Hawthorne Valley Ferments produces and distributes fermented foods made with ingredients from organic and Biodynamic northeast farms. In addition to mortgage and equipment loans from other RSF funds, the company received a loan from the Biodynamics Capital Collaborative for improvements to the new facility.

Our goal is to leverage different forms of financial and human capital from philanthropic funds to create a multiplier effect and flow more resources to innovative enterprises that can’t attract capital from conventional funders. As more funders use their money courageously, whether gift or investment, and work in partnership with other changemakers, we can work with them to begin to fill the funding gap for social entrepreneurs who are creating a regenerative and inclusive economy.

Over a hundred years ago, grain mills were a common sight in the American landscape. Farmers brought their wheat, oats, rye and other grains to them after harvest. Millers turned the farmers’ grain into flours and ground meal that sustained their community throughout the year.

Now most of those roughly 23,000 mills have gone the way of the Model T: only 183 remain, according to the U.S. Department of Agriculture. Four conglomerates mill 80 percent of U.S.-grown flour, and farmers ship their grain long distances to be traded as a commodity. Grains are also processed to the hilt, which removes most nutritional value. And they’re often contaminated with everything from glyphosate (Roundup) to neonicotinoid insecticides, which have been linked to honeybee colony collapse.

In this environment, Cairnspring Mills is a welcome throwback. The startup in Washington’s Skagit Valley is a reinvention of the local flour mill. It grinds “identity-preserved” wheat, meaning that each varietal is chosen for a particular use and stewarded from the farm to flour to preserve its integrity and purity. And Cairnspring, which has created a hub where farmers, bakers, and researchers converge, is helping to revitalize the local farm economy.

“Cairnspring is building a much-needed piece of infrastructure for the food system in the Pacific Northwest,” says Meredith Storton, senior associate, RSF social enterprise lending. “And by returning more value to farmers, they’re making grain a much more viable crop.”

From midlife crisis to rebuilding the local food system

The mill grew out of a modern tradition: the midlife crisis. Kevin Morse, now Cairnspring Mills’ CEO, had just turned 50 and, after a long career as a Nature Conservancy program director and economic development executive, he felt unsettled. He wanted to create a larger impact.

“It dawned on me that so many of the things I cared about and was trying to fix—from community to sustainable farming to taking care of the planet—were affected by the centralized industrial food system,” says Morse. “I decided to try to help rebuild local food systems.”

He decided to concentrate on wheat because of its prominence in the American diet and economy. And, as director of the Nature Conservancy’s Puget Sound Working Lands Program, he’d seen what wheat could do for preventing erosion and restoring the soil. He left the Conservancy in April 2015, co-founding Cairnspring Mills with Tom Hunton, owner of Oregon’s Camas Country Mill, one of the few regional mills in the country.

Morse and Hunton decided Camas would specialize in stone-ground wheat, and Cairnspring—which would be able to handle larger volumes—would specialize in European-style bread flours. They could not find American equipment that worked for small-scale milling, so a Danish company sourced the equipment and helped assemble it on-site. Cairnspring Mills opened its doors in June 2017.

Reneé Bourgault and Scott Mangold, owners of Breadfarm and clients of Cairnspring Mills.

Serving farmers, bakers, and researchers, too

In the agriculturally rich Skagit Valley, farmers have grown wheat for years as a rotation crop to restore the soil. They rarely made money, because they are stuck in a commodity system that usually offers prices that do not allow a profit, plus they had to pay to ship to commodity outlets in Portland.

Cairnspring changed that. Farmers no longer have to ship their wheat to a distant processor, and Morse pays them an average of $2 a bushel above market rates. Cairnspring also works with The Bread Lab at nearby Washington State University to develop grains well suited to the valley’s growing conditions.

“It’s been like an old-fashioned barn-raising,” says Morse. “Everyone, from the local farmers, the Port of Skagit, the Bread Lab and local bakers, have helped build it along with us.”

The mill, which is certified organic, now has five employees; they work with 12 local farms that collectively grow 1,400 acres of wheat, with strains prized for their baking attributes, including Edison hard white spring wheat and Yecora Rojo. Morse holds farmers to high standards: those that are not organic must practice “responsible conventional” growing, which includes avoiding glyphosates and neonicotinoids.

Cairnspring mills grain in just four steps, compared with nearly 60 in corporate processes. The result is flours so flavorful that demand from West Coast bakers—including those at San Francisco’s Tartine, The Breadfarm in Edison, Oregon and Grand Central Bakery in Seattle and Portland—keeps business brisk.

A new model melds the past with the present

Reinventing the flour mill has had its challenges. “We had to create a whole new business model because there wasn’t a lot we could replicate,” says Morse. This included the logistics of buying, handling, and storing grain on a much smaller scale than industrial flour companies. It also required dealing with a regulatory environment unfamiliar with small-scale milling. For example, simply securing a certificate of occupancy so they could move into the building took nine months.

Having the cash needed to pay farmers top dollar for their wheat was a serious issue. Cairnspring pays farmers for their harvest every November or December. “Then I just sit on the inventory as I mill it and sell it,” says Morse. “We make our profit over the next year.”

Morse needed a line-of-credit, but traditional agricultural lenders weren’t an option because the mill didn’t have a positive cash flow yet. So last summer, he turned to RSF, which many people had recommended because the values of the two organizations were aligned.

The perfect match: RSF Food System Transformation Fund

Cairnspring was an excellent match for RSF’s Food System Transformation Fund. “The capital for the fund comes from foundations and individual investors who are interested in rebuilding regional food systems, and they understand the inherent risks,” says Storton. “The fund’s structure and capital source allow us to support earlier-stage businesses with important missions and challenging business models. We wanted to support Cairnspring because we see them as a very necessary component of the food system.”

To meet Cairnspring’s need, RSF used the mill’s purchased grain as the primary collateral. When that value came up short, RSF added $50,000 guarantee from its Local Food Capital Collaborative, a philanthropic fund created to provide flexible capital. With the guarantee in place, RSF provided Cairnspring with a $300,000 line-of-credit.

Stability provides freedom to widen impact

Thanks to RSF’s support, Cairnspring Mills was able to pay its farmers in a timely fashion, and Morse has not had to sell more equity in the company (as he has done in the past) in order to stay in business. The stability RSF has provided also means that Morse can pursue his vision of opening more regional mills. He’s developing a business strategy, and looking at communities in California, Arizona, and Colorado for locations to build two more mills by 2020.

For Morse and the team behind Cairnspring, adding new mills is a way to create broad-scale impact. “We think there is a tremendous opportunity to grow and expand to other regions,” he says, “and continue to revitalize and sustain our local farm economies.”

]]>Meet RSF’s Integrated Capital Fellowshttp://rsfsocialfinance.org/2018/05/01/meet-rsfs-integrated-capital-fellows/
Tue, 01 May 2018 17:00:21 +0000http://rsfsocialfinance.org/?p=18925The RSF Integrated Capital Institute prepares existing and aspiring practitioners to activate the positive potential of capital. Fellows learn alongside a group of experts in the field who are leveraging capital with an integrated and …

]]>The RSF Integrated Capital Institute prepares existing and aspiring practitioners to activate the positive potential of capital. Fellows learn alongside a group of experts in the field who are leveraging capital with an integrated and strategic approach to effect an articulated social mission. Fellows learn how to structure financial transactions and implement effective integrated capital strategies. A nine-month program centered around three in-person training intensives, The Institute provides access to one-on-one expert advisors, peer coaching, case studies, webinars, and independent study.

We’ve highlighted some of our inaugural cohort of Integrated Capital Fellows below. Visit the blog again later this month for more highlights! The full list of Fellows and more information about the program is available here.

Nwamaka is a Senior Fellow at the Movement Strategy Center and serves as an Advisory Board Member to Oakland Rising Action. She also serves on the boards of Thousand Currents, Center for Third World Organizing, and the Schumacher Center for New Economics.

As principal & founder of Nwamaka Agbo Consulting, a firm centered on the principles and practices of Restorative Economics, Nwamaka provides project management, strategic guidance, and training and facilitation services to community-owned and governed projects as a power building strategy for self-determination.

JEN ASTONE

As executive director of the Swift Foundation, Jen Astone is focused on transformative food system investments, providing grants, investments, and integrated capital to promote cultural and biological diversity. The Swift Foundation supports indigenous and local communities as well as organizations engaging in land and resource rights, traditional knowledge, agroecology, and alternative economic models. Swift is a member of DivestInvest, the AgroEcology Fund, and the Global Alliance for the Future of Food.

Jen is expanding a brief entitled “Investing in Food Systems: Gaps in Capital, Analysis and Leadership.” Through a deep dive into The Swift Foundation’s current food system investments, Jen is examining how different funds and investments use integrated capital to provide foundation investors different types of return with an emphasis on transforming food systems toward human and planetary health.

TIFFANY BROWN & KATE POOLE

Through work with Resource Generation, YES!’s Leveraging Privilege for Social Change programming, and Be Present, Tiffany Brown has developed a unique skill set aimed at bridging class, race, and privilege. Her passion is for bringing humanity to the work of personal and collective transformation by unpacking destructive patterns that divide us while developing new models rooted in shared power. In 2016, Tiffany started her work in finance at Fresh Pond Capital.

Kate Poole began her work in the new economy space at the Schumacher Center for New Economics. She has addressed matters of class privilege and inheritance as a member-leader of Resource Generation and as a founder of Regenerative Finance.

Kate and Tiffany are working in transformative partnership across class and race to launch a financial advising firm. With an explicit commitment to racial and economic justice, they are partnering with values-aligned individuals to bring greater integrity to their portfolios and shift resources to the solidarity economy movement. Through holistic, embodied approaches, Tiffany and Kate are working in community with inheritors and movement partners to transform financial patterns and introduce practices of transparency, integrity, and alignment.

Y. ELAINE RASMUSSEN

Y. Elaine Rasmussen is the CEO of Social Impact Strategies Group (SISG). Driven by the mission to mainstream impact investing and democratize access to capital by and for women and communities of color, SISG provides social impact advising, measurement, and business development consulting. SISG also provides education briefings for entrepreneurs and investors and produces events designed to drive positive, sustainable social impact in the entrepreneur ecosystem.

The ConnectUP! Integrated Capital Fund pilot project is a social finance pilot to establish a blended capital fund. It includes capital planning, community support, and culturally responsive business development designed to address the challenges facing women and people of color as social entrepreneurs. Using a proactive, capital-planning approach, this project aims to guide enterprises through the “valley of death.” The pilot is currently working to raise $500,000 to establish a proof of concept.

]]>On April 1, 2018, RSF Social Finance increased its RSF Prime base interest rate for borrowers by 0.25% to 5.25%. The other participants in the Social Investment Fund (SIF) are affected as follows: the investor rate is now 1.00%, up from 0.75%, and the RSF revenue share remains at 4.25%.

RSF Prime is reset each quarter using RSF’s associative community-based approach. We host quarterly pricing gatherings for investors, borrowers, and RSF team member representatives to give the three stakeholder groups in the fund the opportunity to learn about each other, discuss how rates will affect all stakeholders, and then make recommendations for possible interest rate changes. We believe that this methodology furthers our mission to create financial relationships that are direct, transparent, and personal.

The decision to change interest rates is a multifaceted one that balances many factors. The SIF Pricing Committee makes the final determination regarding RSF Prime by weighing the following:

Recommendations from RSF’s quarterly pricing gathering.

Feedback gained through ongoing client conversations with the lending and client engagement teams.

Market forces. RSF tracks what is happening in the market with the goal of anticipating moves that could influence the needs of our community.

RSF needs. There are costs associated with lending that range from staffing and financial data security to high-touch efforts in support of promising social enterprises. We hold that these operating needs must balance with those of the whole.

Shifting Needs

While there has been upward movement in the financial market since January 2017, this is the first change to RSF Prime in five quarters.

While we know from investors that the primary impulse for opening a Social Investment Fund account is the incredible work and organizations the fund supports, rather than the return, we have increasingly heard from investors that the return they receive from RSF is modest when compared to the rest of their social impact portfolio. With this current rise, the RSF returns are more competitive with other low-risk, liquid, and high-impact funds.

An Open Dialogue

At the March pricing gathering in Seattle, WA, there was thoughtful conversation about the pros and cons of a rate change. Some borrowers expressed a sense that they could tolerate an increase without disruption to their business. There was some sense from the non-profit borrowers that since they have less control over income streams and set budgets once a year, a rate increase would be difficult. Yet, there was appreciation for what RSF offers and a reticent willingness to support a small increase. We advise borrowers with concerns regarding the RSF Prime increase to contact their RSF relationship manager.

One former borrower, now an investor, stated that if the rate went up, they would increase the balance of their fund. One participant was both a borrower and an investor and was able to share both perspectives in a way that made the connection between the two very clear to the rest of the group. In the end, we heard from investors and borrowers that they trust RSF to make a decision that will best serve the whole community, especially if there is a growing need for SIF capital to meet borrowing needs. Given the growing demand for our loans and the desire to attract new investors, we felt a modest increase to the rate was prudent at this time, and that the optics of 1.00% will test the question of what rate is necessary to attract new investors.

As financial and economic markets enter a period of increased uncertainty, we anticipate conversations about RSF pricing to grow more challenging. As a result, we encourage all our partners to stay in dialogue with us about how pricing—and more generally, money—is informing their interactions with the RSF stakeholders. We are committed to leading the field of social finance and to honoring our community pricing approach. We count on your insights to create financial relationships that are direct, transparent, personal, and focused on long-term holistic benefit.

]]>Activism in the Realm of Money & Powerhttp://rsfsocialfinance.org/2018/04/24/financial-activism-and-rsfs-integrated-capital-institute/
Tue, 24 Apr 2018 22:59:03 +0000http://rsfsocialfinance.org/?p=18899RSF’s Integrated Capital Institute faculty—Akaya Windwood, Joel Solomon, and Marian Moore—reflect on what it means to be a financial activist and the opportunity the fellows have to drive positive social and environmental change.

]]>Enrique: What is the Integrated Capital Institute, and who is it for?

Akaya: It’s for financial activists who want to leverage capital as a tool for positive social and ecological change. Over the nine-month program, the fellows learn alongside a group of experts in the field who are leveraging different kinds of capital through an integrated and strategic approach.

Marian: We’re weaving three strands together. One is the self-awareness and leadership piece in the realm of power and money. Another is understanding the current financial system and where and how we might strategically intervene. Lastly, it’s the more technical aspects—how does one structure the financing? All of these are important ingredients to supporting the empowerment of financial activists.

Enrique: I understand a financial activist to be a person who uses the power inherent in managing and applying money to bring about social change. Is that correct?

Joel: I would clarify what we mean by social change. Social change can be both good and bad.

Akaya: True. I’d say there have always been people very active in how they use their wealth to move a specific agenda, but they haven’t necessarily been working toward the common good. What’s new is that those of us who have been relegated to the margins of financial power are realizing that we can use the tools of finance to bring positive change. We’re now seeing more financial activism working toward community building and circulating wealth as opposed to consolidating it.

Integrated Capital fellows and faculty at a program intensive in Paicines, CA.

Enrique: For lasting, positive social change to happen, you need systems change, which requires more than finance. Do financial activists need to be broader activists as well?

Akaya: There are those who will be very fine financial activists, and there will be those who will do other things. And we need it all. If I had to take everything into consideration in order to move, I couldn’t move. What’s important here is that we build the interconnections among people so that those of us who are working on economic justice are connected to folks who are doing work in other areas.

Marian: Yes, that’s an important part of this emerging role of financial activism; intentional interconnection. Coming into the Integrated Capital Institute with many years of experience in working with people who have wealth, I am relishing the opportunity to support people with common goals but different histories, capacities, and expertise.

Joel: The most important essence of all of this for me is that people have been disconnected from the source of their wealth. The systems that have created wealth are inherently linked to the systems that have also created social and environmental problems. This is part of why the Integrated Capital Institute was created. We need to find ways to direct money to the common good, not for the expansion of individual wealth.

Akaya: One of the things I’ve learned in this program is how money isn’t very real. It’s a set of agreements around what gets valued. So there are opportunities to intervene. We can begin to re-value based on the change we want to see.

Joel: Part of that is empowering a more diverse pool of people. The financial system that we have is an outgrowth of colonialism that was designed to be highly extractive and to concentrate wealth in fewer and fewer people’s hands. The changes we seek are going to disrupt this system and turn it on its head. Social change activists have tended to look at wealth as a big evil. However, with financial activism, we’re starting to look at money differently. You can build businesses that treat people fairly, take responsibility for their externalities, and care about their communities. There are so many ways that the use of money can be reformed and directed for the better. That’s what we’re doing with the Institute – supporting people to be empowered to use the tools of finance to direct wealth in different ways.

Marian: I would add that we’re also working to give people agency. We’re trying to foster agency through education and demystification. I’m one of the people here who’s not a financial professional, but because I’ve been working in the field for a dozen years, I’ve come to realize through education that it’s not that complicated. Proximity and education enable the demystification of finance.

Akaya: So many people who call themselves social change activists are often terrified of thinking about money. The financial system is opaque and, therefore, complicated by design. We’re saying no, it’s actually not that hard. Our intention is to make these ideas readily available to anyone who has the interest and passion for it.

Fellows engaged in conversation at Paicines Ranch.

Enrique: This cohort is a mix of financial professionals, movement builders and people in the philanthropic field who can direct capital in significant ways. Do they fully realize the power that they have in these roles?

Joel: We’re trying to help people see their alternatives. These professionals are making choices with financial products all the time. It’s about bringing consciousness and an intention that says “I am only going to invest in things that are moving towards better rather than doing further damage and extraction.”

Marian: And there’s another conceptual cultural intervention that we’re making as well. There’s the default setting of wealth managers regarding fiduciary duty. The widely accepted definition of fiduciary translates to earning money on money. But when you dig down into that fiduciary responsibility, it also requires other duties including a duty of care and duty of obedience. We’re trying to intervene in the notion that duty is only about making more money. Duty should also look at deeper responsibilities around who and what are being impacted. To what are we being obedient? We want to empower people to choose what their fiduciary responsibility is.

Akaya: To do that we’re really interested in empowering people to be brave, courageous people who will break out of the frame and create some new frames. It’s been interesting to watch this cohort go from not knowing one another and feeling a little guarded. What does this mean? What are we doing here? Slowly we’re moving toward an “aha” moment and recognizing that we need each other. We’re listening to one another; we’re sharing our wisdom and sharing our resources.

Enrique: Any final thoughts?

Joel: Urgency is upon us more than we want to realize. We all need to focus ourselves on whatever resources we can influence and whatever people with resources we can influence. There is plenty of money to solve the world’s most pressing problems, but our mindset and systemic barriers are holding us back. We can demand better and we have to do so.

Marian: I would add that we’re wanting to stimulate creativity with money. You don’t always think of those two things together, but it’s a relationship that can actually be quite powerful.

Akaya: And let’s have a good time while we’re doing it! Social change can be joyous and full of laughter and learning. Let’s approach this in a different way so that finance is not something dreary and dull. It should be available to all of us and the truth is it needs to be—we need each other.

]]>In the spirit of reconsidering many aspects of economic life, questioning underlying assumptions, and finding ways of reimagining the next economy, the division of labor has received little attention. It is certainly hard-wired into the current capital-driven market economy that seeks to maximize profit. While an awareness of the consequences of this profit-seeking economy is growing, the nature of work and how to organize it lags behind even in the social enterprise world. The division of labor in its many expressions has both a natural origin and a more mechanistic application. So, it is not the concept itself that is here under examination but rather how it has been applied and, more recently, what might be considered an unintentional consequence.

Since the beginning of civilization, people have engaged the world of natural resources to meet their and others’ material needs. In other words, they have created an economy. Some people have been ingenious at working with and transforming natural resources, others in organizing that work for efficiency, effectiveness, and broader distribution.* The division of labor is an inevitable presence in both these streams and is one of those bedrock economic concepts so prevalent that one can hardly question its axiomatic function. All human beings have their own particular capacities of mind, body, and soul and thus their own relationship to other human beings and to nature. The idea of mutuality, of shared responsibility in community and the relevance and application of those capacities, is the essential foundation of economic life.

Historically, there have been two primary aspects of thought regarding the division of labor. One subscribes to the inevitable efficiency of production that results from the division and specialization of labor in the service of capital. The second identifies the dehumanizing effect of such specialization based on the notion that the developing human being wants to learn and be whole and, thus, needs to engage in a range of activities to maintain interest in life and nourish the soul. Plato actually speaks to both streams in his Republic—specialization is necessary to leverage individual capacities, but this necessity runs counter to the inherent holistic impulse of learning about the world and self. One can find elements of this argument with Adam Smith (industrialization) and Émile Durkheim (The Division of Labor in Society) as well as Karl Marx (alienation) and Ralph Waldo Emerson (self-reliance).

Economists have to cross paths with the human and social reality of the division of labor in understanding economic life—if they want economic thinking to be practical rather than theoretical and see labor as something other than a commodity. Such division is a natural result of how we organize work by self-governed social processes through which individual and organizational strengths are recognized in producing the material goods we need or want. Contrast this with a more extreme product-centric example of an imposed division of labor, the assembly line. Specialization and more granularity mark the progression toward singularly focused knowledge, limited activity, and the sacrifice of human creativity—all sparked by the relentless drive for efficiency. In some professions such as medicine, deep but narrow specializations have led to a kind of efficiency and effectiveness of practice that can border on the miraculous in what they can accomplish. This statement might seem to contradict an earlier one, but in the U.S., for example, doctors also operate in a medical-economic system that has favored these kinds of specialization and subspecialization. In a certain sense, this approach, while celebrating research and professionalism, is still organized within a mechanistic imagination.

The drive for efficiency also correlates with the needs, desires, or avarice we express in the production of capital. This is the modern condition of capitalism. It has genius and sorrow. Genius is in specificity—in the ability to replace a hip or heart effectively or store vast amounts of data in ever smaller real estate. Sorrow comes in the competitive drive for profits that plays host to all this innovation with little regard for the consequences to the human beings producing it. Capital seeks its own increase even as I experience gratitude for what capital has made possible. And people are used up or replaced in capital producing work and rarely share in the capital that accrues to the one who has the idea and organizes the labor to produce it. Here there does seem to be what I would call a disconnect that shows itself in the ascent of intellectual property—a monetizing and extractive factor of modern industry through which a fictive claim of ownership is made on what is essentially spiritual, the idea. Just as nature does, consciousness is in constant metamorphosis and evolution. Look at the invention and constant advancement of say an item such as a laptop. It is an expression of applied intelligence over time, each stage learning from the last. Thus, to commodify one part of this developmental process is a moral breach as well as a self-interested and false claim of rights.

Division of labor is a completely organic emergence in the production of goods. Within a community of work, everyone has capacities that serve economic life. For example, some are good at growing vegetables, some at making clothes, some at building. The community can recognize these strengths quickly and organize activities around them. It makes the highest and best use of skills and time, and such economic participation leads to a sense of satisfaction in the form of right livelihood. Karl Marx made an important distinction in two qualities of the division of labor: one is social and derives from mutual community agreements, the other is imposed by the needs of manufacturers and the owners of the means of production. The former is, of course, human and organic in origin; the latter is system-centered and oppressive in nature and reduces labor to a commodity.

What has yet to be addressed is a generative connection between the division of labor and the evolution of artificial intelligence, especially as applied to the production of goods and services. This is a further extension of dehumanizing labor in the service of capital. The imagination here is the movement from increasingly refined divisions or specializations to an even more reductive micro division of labor into sequences of binary (on-off) switches. Then those switches are programmed to produce mechanistic activity that imitates thought-free human actions—although, of course, it is amoral. This is a division of labor that translates thoughts—the collective memory of the history of human work—into parts devoid of feeling. What is replaced, and what is displaced? The imitation, no matter how sophisticated, is still the result of someone’s programming, although computers can now learn and program themselves accordingly as their algorithms respond to new data. In a limited way, human intelligence can be mapped, and that map can be turned into a topography of something that looks like thinking. Given the speed of computation and the management of complexity, many nearly simultaneous alternative pathways could appear intuitive. It will certainly be marketed that way, as the underlying drive is still essentially commercial—improving efficiency during the production of capital.

One result of automated labor is to free people from the consequences of redundant manufacturing tasks like those that Charlie Chaplin so wonderfully characterized in his classic film Modern Times. So, there are some positive but socially challenging aspects to the application of basic artificial intelligence. The second historical aspect of the division of labor, the question of the human qualities, resurfaces as phenomenally important. If the workforce labor as we know it is replaced or transformed, what is the function of education in the context of human development? The sense of self and purpose that has come to be shaped in modern society is primarily defined by or comes as a result of what a person does rather than who a person is. This is what the existentialists were telling us back in the last century. But if this modern condition is no longer to be the case, understanding human beings and how to support them in the self-directed striving toward becoming human is a relatively new task for education. This begs a new question: Will the surplus capital generated by the economic efficiencies be made available both for this new education and for some form of real basic income to support those people who are freed from mechanistic labor? What I am really putting forward, in the spirit of opening a new dialogue at closing time, is the idea that the redemption of the long arc of the division of labor and its adverse consequences for human beings will be the liberation of capital itself. It will be liberated in service to the elimination of suffering and the further evolution of humanity. This will signify a radical transformation of capital, our economic relationships and I would say, consciousness itself.

It was visionary to imagine the division of labor, to imagine that a motorcar could be mass manufactured. It was visionary to imagine that a computer could replicate aspects of human labor. There is a line of service to culture and moral intention in these visions even though they have made some people enormously wealthy and some others impoverished. With the recognition that the assembly line has been dehumanizing, and that computers are amoral, we have to rediscover our moral nature if we are to thrive beyond the artifice of intelligence. And, I do not believe there is an algorithm for that.

*In his cycle of lectures given in 1922 on economics and now titled Rethinking Economics, Rudolf Steiner spoke about the two streams of value creation in the economy. Stream one is the direct application of labor to land (natural resources). Stream two is the application of intelligence in organizing labor. The development of value, while important in economic thinking, is not a central consideration in this essay, but the two streams have direct relevance for the division of labor.

]]>My Summer as an MBA Intern at RSFhttp://rsfsocialfinance.org/2018/03/29/mba-summer-intern/
Thu, 29 Mar 2018 17:48:44 +0000http://rsfsocialfinance.org/?p=18731As I entered the Presidio in breathtaking San Francisco, I was excited to start my MBA summer internship at RSF Social Finance. Having worked in finance and consulting before Wharton, I was attracted to this …

]]>As I entered the Presidio in breathtaking San Francisco, I was excited to start my MBA summer internship at RSF Social Finance. Having worked in finance and consulting before Wharton, I was attracted to this role by the opportunity it presented to apply my learnings to support social entrepreneurs and challenge my thinking around traditional investing and business strategy. I had prior experience in impact investing via Wharton Impact Investing Partners and was eager to continue building my skills and knowledge of social finance that summer at RSF.

With guidance from RSF’s Chief Investment Officer, Susie Lee, I took on several interesting projects that broadened my understanding of impact investing and social finance. One project I worked on was the newly launched Women’s Capital Collaborative, a fund focused on the economic empowerment of women and girls. In completing a landscape analysis of gender lens funding to inform the fund’s decision-makers, I learned about integrated capital, a unique approach for providing diverse forms of capital to entrepreneurs that range from loans to equity. Don’t assume the flexibility makes this work any easier though. By performing due diligence on investment opportunities, I learned of the rigor and dedication that RSF staffers bring to supporting social entrepreneurs while safeguarding investor principal. I can recall many discussions with my RSF colleagues on business models, impact metrics, and the role of funding.

Another endeavor I dedicated my time to that summer was the analysis of an equity raise for a longtime client doing sustainable beverage production and distribution. I was thrilled to leverage my prior experience in consulting global beverage companies and share key insights with the team. After completing a valuation model, I was also able to supply our client with high-level recommendations, some of which were taken on.

The final project I worked on that summer was to support RSF’s philanthropic asset management. Using past knowledge of developing markets, I evaluated two high-impact organizations with global reach for investment. As part of the diligence process, I met the prospective fund’s management teams and learned of their strategic vision for achieving both financial and social returns.

On a professional level, working at RSF provided me with various opportunities to speak with my colleagues and industry leaders and further expanded my knowledge in the impact investing space. Discussions about different asset classes, yield expectations, and assessing impact stimulated my understanding, not just about social finance, but also the role of capital in our society.

Personally, I cherished the moments of bonding that I shared with RSF colleagues. I enjoyed attending Barry’s Boot Camp in the early morning, eating at food trucks overlooking the Golden Gate Bridge, and the now renowned ‘80s music and costume party at our beautiful Presidio office. I couldn’t have asked for a more perfect summer.

I am so grateful to everyone at RSF who trusted me with substantial responsibilities while enabling me to make an impact last summer. I shall bring all I’ve learned to Wharton and beyond.

]]>Now Accepting Applications for Second Cohort of Integrated Capital Institutehttp://rsfsocialfinance.org/2018/02/27/integrated-capital-institute-application-announcement/
Tue, 27 Feb 2018 20:53:56 +0000http://rsfsocialfinance.org/?p=18641RSF Social Finance has opened the application process for its Integrated Capital Institute. This intensive program will give financial practitioners the tools and strategies they need to help values-driven clients deploy various forms of capital

]]>RSF Social Finance has opened the application process for its Integrated Capital Institute. This intensive program will give financial practitioners the tools and strategies they need to help values-driven clients deploy various forms of capital for lasting social and environmental benefit.

Fellows will learn about wealth psychology, whole portfolio activation, and RSF’s integrated capital approach: the coordinated use of diverse financing tools (including loans, loan guarantees, investments, and grants), and network connections and advisory services to support enterprises that are solving complex social and environmental problems.

The Integrated Capital Institute is ideal for professionals who work with family foundations, family offices, high-net-worth individuals, and community foundations. The nine-month program involves three in-person training intensives running four days each, one-on-one sessions with expert advisors, peer coaching, case studies, webinars, and independent study. RSF is accepting applications through April 30, 2018.

“Wealth holders who want to leverage capital for transformative change need financial practitioners who have the same passion as they do, as well as the leadership skills and financial expertise to deploy capital in ways that will have a lasting and positive impact,” said Deb Nelson, RSF’s vice president, client and community engagement.

Faculty members include Joel Solomon, chair and co-founder of Renewal Funds, Marian Moore, producer and lead facilitator of Play BIG and Lead with Land, and Akaya Windwood, president of the Rockwood Leadership Institute.

“We plan to educate and connect thousands of integrated capital practitioners through this program and our other field-building efforts. These practitioners will serve as the bridge that connects wealth to innovative solutions,” said Nelson.

Apply online by April 30

Philanthropic support allows us to charge tuition for the Integrated Capital Institute on a sliding scale, from $10,000 to $25,000. The fee covers instruction, coaching, materials, webinars, and other resources, as well as on-site lodging and meals during the intensive sessions. Full details and an application are available at http://rsfsocialfinance.org/integrated-capital-institute. Applications are due April 30.

]]>RSF Social Finance Names New CEOhttp://rsfsocialfinance.org/2018/02/23/rsf-social-finance-names-new-ceo/
Fri, 23 Feb 2018 19:17:11 +0000http://rsfsocialfinance.org/?p=18620Jasper van Brakel, former head of Weleda North America, will lead the pioneering social enterprise funder in its next phase of innovation

RSF Social Finance has named Jasper J. van Brakel, former president and CEO …

]]>Jasper van Brakel, former head of Weleda North America, will lead the pioneering social enterprise funder in its next phase of innovation

RSF Social Finance has named Jasper J. van Brakel, former president and CEO of Weleda North America, its new CEO effective March 19. In addition to offering proven leadership—van Brakel built Weleda’s brand in the U.S. and Canada and oversaw substantial growth—he brings impact-driven investing experience and a deep connection with RSF’s values to the position.

“When I heard that RSF is looking for a new leader, I was immediately excited and intrigued,” van Brakel said. “The people who are most inspiring to me are those who take a radical idea and execute it brilliantly in the interest of the whole, bringing ideals from 30,000 feet to ground level, where they can truly work to bring about change. That’s what RSF does as an organization, and it’s what all of RSF’s donors, investors, borrowers, and grantees are doing.”

Impact finance exerts a strong attraction for van Brakel

Van Brakel has long felt a pull toward impact finance. After a long executive career in Europe and North America with Weleda, a pioneer evergreen company committed to organic and biodynamic wellness products, he became a partner in Newpark Capital, which provides private equity for lower- to middle-market impact-driven companies. He also is an advisor to Armonia, a family office that makes long-term investments in projects promoting regeneration, and serves on the corporate boards of two impact companies.

“Jasper is a seasoned executive with experience that spans various for-profit and nonprofit purpose-driven organizations,” said Mark Finser, chair of the RSF board of trustees. “His experience leading Weleda, which is committed to organic and biodynamic wellness products and was co-founded by Rudolf Steiner in 1921, gives him connections to many of RSF’s borrowers as well as to RSF’s mission and values. Together with our outstanding executive team and staff, Jasper will further our goals to revolutionize the way people relate to and work with money.”

RSF has an opportunity to build on its biggest year

Last year was RSF’s biggest ever: it surpassed $200 million in assets and flowed more than $50 million in loans, investments, and grants to organizations with high-impact missions. RSF has the potential to lead on a larger scale, van Brakel said, by continuing to come up with convention-challenging initiatives and building on its existing path-breaking programs. These include community pricing meetings, where investors and borrowers confer on fair interest rates; Shared Gifting Circles, which turn grant making on its head by having the grantees distribute money among themselves; themed philanthropic funds called Collaboratives that support innovative early-stage social entrepreneurs; and the Integrated Capital Institute, which teaches financial activists powerful strategies to leverage capital as a tool for long-term change.

“RSF is the clear leader in integrative, catalytic capital in North America,” van Brakel said. “At the same time, I see the potential to benefit from current trends and expand RSF’s impact in the world while staying true to the organization’s principles and values.”